The U.S. Minerals Management Service has scheduled a Nov. 16 workshop at its New Orleans offices to discuss deepwater lease developments that may involve subsea well completions.
MMS wants to develop criteria to distinguish between gathering and transportation to determine allowable deductions in calculating royalty value.
The agency said its regulations provide an allowance for the actual and reasonable costs of transporting production when value for royalty purposes is determined away from the lease, but there is no allowance for gathering production (which it defines as: movement to a central accumulation and/or treatment point).
It said, "Recent deepwater development technologies and their relation to gathering and transportation are not specifically outlined in current regulations. "Based upon discussions with industry, the agency is seeking comments on water depth, distance of movement, location of the approved measurement point, mark
etable condition of the production, on-lease vs. off-lease movement, and other criteria that should be used when making the gathering/ transportation differentiation for deepwater leases."
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